Decentralized cryptocurrency trading platform AirSwap has announced a new partnership designed to aid in the tokenization of one of the Western Hemisphere’s most expensive real estate markets.
That partnership, inked with FINRA-registered broker-dealer Propellr, will see the two firms use AirSwap’s peer-to-peer trading protocol to create a platform that allows brokers and their clients to tokenize securities and trade these crypto tokens in a manner that complies with securities regulations.
AirSwap and Propellr will initially focus their efforts on the New York real estate market, though details on how they aim to achieve this remain slim.
Though often labeled a decentralized crypto exchange (DEX), AirSwap does not quite fit this designation since it serves more like a decentralized search engine that helps buyers and sellers arrange trades over a peer-to-peer protocol.
In a statement, AirSwap highlighted how this technology can benefit secondary market transactions:
“Ultimately, we hope to reduce the time to complete secondary market transactions of private securities from months to days, with the actual execution, clearing, and settlement taking place in a matter of minutes. With a non-custodial, no order book model, our technology is far better positioned for the private securities market than alternatives that take custody, use order book matching engines, and wrongly assume that private securities will trade with the same frequency as publicly traded securities or cryptocurrencies.”
They aren’t the only ones who believe that real estate, a notoriously illiquid capital asset class, will greatly benefit from tokenization.
Recently, crowdfunding giant Indiegogo partnered with a broker-dealer to host its first security token offering (STO), which aims to sell tokens that represent equity in a luxury resort in Aspen, CO.
Separately, cryptocurrency startup Swarm has begun issuing tokens that represent equity in privately-held tech companies such as stock trading platform Robinhood, helping make another class of secondary market securities more liquid.
As CCN reported, AirSwap raised $20 million during an initial coin offering (ICO) presale held last August and September and ultimately netted close to $25 million following the conclusion of the firm’s public sale, according to data from CoinSchedule.
Earlier this month, AirSwap announced the creation of an over-the-counter (OTC) cryptocurrency trading product, which is currently in private beta.